Kim Dotcom may see himself as being at war with Hollywood, but the man has quite a sense of theatrics himself. The show he put on for the world tonight at his mansion outside Auckland was audacious and loud, featuring a Maori-themed musical performance by Tiki Taane, a raid re-enactment complete with helicopters marked "FBI," and dancing girls clad in military-style dress (but with miniskirts). That's how Dotcom announced his new service, Mega, to the world.

The service kicked off less than 24 hours ago, one year—to the minute—after Dotcom's house was raided and his old file-sharing service, Megaupload, was shut down.

"Sometimes good things come out of terrible events," Kim told the gathered audience of a few hundred people. "If it wasn't for a giant comet hitting the Earth, we would still be surrounded by angry dinosaurs—hungry, too!" Kim smiled. "And if it wasn't for the raid, we wouldn't have Mega."

He recapped how his company was seized, lamenting how it was shut down without the opportunity to make an argument to a judge. "Communication was taken offline, and free speech was attacked!" Dotcom said, in a staccato light German accent. But the seizures have opened a new public debate, he said. "The Internet belongs to no man, or industry, or government!" he said, to applause. "No matter how many politicians you lobby, no matter how many SOPAs you put together in Congress, you will not succeed in efforts to take control of our Internet!"

Having never watched Dotcom actually speak before, I was impressed by the event. Mixing the Universal Declaration of Human Rights with a techno soundtrack, all in the service of "Internet freedom"—it's quite a trick, and it takes a special kind of guy to pull it off.

Encryption as "refuge from the eye of the community"

So why is Mega going to be the "privacy company?" Because that's the value at great risk in the Internet age, says Dotcom.

"Privacy is a basic human right, but it has become increasingly difficult to communicate privately," said Dotcom. "More and more companies are collecting data about you and your behavior. ISPs are inspecting the data you transfer, on behalf of the content industry. Hosting companies sell their decommissioned services and hard drives with your data still on it... the US government is investing billions into massive spy clouds."

Privacy isn't just a personal or selfish interest—it's a value vital to keeping power in check, he argued. "It's about the human need for refuge from the eye of the community. Privacy maintains balance between the individual and the state."

At that point, perhaps Dotcom believed the audience needed a little reminder about the power of the "state." Because at this point in his talk, helicopters marked with "FBI" on the sides flew over the gathering. A voice boomed over a loudspeaker: "This is a crime scene and an illegal gathering!"

"FBI" Helicopter descends on Kim Dotcom's party.

Mega / Kim Dotcom

The crowd stays seated while jeeps and choppers approach for the "raid."

Mega / Kim Dotcom

Dotcom was quickly surrounded by his "guards," six women in sexy military-style miniskirts, while trucks rolled up to the audience. "Stop this madness!" shouted Dotcom. "Let's all be friends."

Next everything settled down into a sort of straightforward corporate Q&A session. The team behind Mega was introduced. First, CTO Mathias Ortmann, chief marketing officer Finn Batato, and Bram van der Kolk—all arrested during the raid last year—were trotted up onstage.

Next came Tony Lentino, the new CEO of Mega, who is also a major investor who has helped Dotcom through tough times—paying the rent on his house, for example, when he was in prison.

Dotcom describes how he'll stretch out the "long white cloud"

First question from the press: Will Mega be a "Dropbox killer?"

"I think there can be hundreds of competitors [in cloud storage], and they can all do well," said Dotcom. "Some people won't want encryption, and don't care about it. I don't want to see myself as a killer of anything. Ultimately we hope to list our company at the New Zealand stock exchange."

What are the consequences for New Zealand?

"We are going to hire back all Megaupload employees who want to come back, and in addition will hire staff in New Zealand. We are a New Zealand company, New Zealand has been good to us. They saw there is something fishy about this whole case, and we want to give back. Over the coming years, we will hopefully create a few hundred jobs."

What about copyright infringement?

Same answer as before. "We take things down!" said Dotcom. "We take things down. We did that with Megaupload, and went even further [by offering copyright owners direct access to the site]."

"There's a very robust DMCA takedown process on Mega," chimed in Ira Rothken, Dotcom's main US-based lawyer. "There's an automated form, as well as an e-mail process. It meets or exceeds the industry standard for takedowns."

At the end of the questions, Mega's relationship to New Zealand, the host country it looks like he may be bound to for some time, came up again. "This government was too easily convinced of this case [against Megaupload]," said Dotcom in answer to an early question. "I'm not a criminal and I've done nothing wrong. I would like to be an integral part of the New Zealand community. The Maori call New Zealand the 'long white cloud.' I've just made it a little bit longer."

You can get MP3 tracks for $1 on iTunes, yet music piracy is still widespread. How much easier can they make it?

I guess you missed the "fair price" criterium. Fair is what's fair in the eye of the beholder. Is a song recorded in 1976 still "worth" $1? What if it is an Elvis song (for the younger readers, Elvis was a singer who's been dead for a long, long time)?

OK how about a song from 1966? Is it fair to price it at $1? It all depends on what the beholder thinks is fair. Maybe 1956? 1946? 1936? How about 1926? Is $1 still a fair price for a song recorded over 80 years ago? 1926 is the year the "Weimar Republic" joined the "League of Nations".

Note: this discussion has NOTHING to do with "what is the law" or "what the seller deems right".

You can get MP3 tracks for $1 on iTunes, yet music piracy is still widespread. How much easier can they make it?

I guess you missed the "fair price" criterium. Fair is what's fair in the eye of the beholder. Is a song recorded in 1976 still "worth" $1? What if it is an Elvis song (for the younger readers, Elvis was a singer who's been dead for a long, long time)?

OK how about a song from 1966? Is it fair to price it at $1? It all depends on what the beholder thinks is fair. Maybe 1956? 1946? 1936? How about 1926? Is $1 still a fair price for a song recorded over 80 years ago? 1926 is the year the "Weimar Republic" joined the "League of Nations".

Note: this discussion has NOTHING to do with "what is the law" or "what the seller deems right".

What changes about a song over time that makes it less valuable? Are you implying Beatles tracks are worth less than Bieber tracks?

I agree that current copyright lengths are excessive, but who the hell listens to 1926 tracks?

You can get MP3 tracks for $1 on iTunes, yet music piracy is still widespread. How much easier can they make it?

I guess you missed the "fair price" criterium. Fair is what's fair in the eye of the beholder. Is a song recorded in 1976 still "worth" $1? What if it is an Elvis song (for the younger readers, Elvis was a singer who's been dead for a long, long time)?

OK how about a song from 1966? Is it fair to price it at $1? It all depends on what the beholder thinks is fair. Maybe 1956? 1946? 1936? How about 1926? Is $1 still a fair price for a song recorded over 80 years ago? 1926 is the year the "Weimar Republic" joined the "League of Nations".

Note: this discussion has NOTHING to do with "what is the law" or "what the seller deems right".

What changes about a song over time that makes it less valuable? Are you implying Beatles tracks are worth less than Bieber tracks?

I agree that current copyright lengths are excessive, but who the hell listens to 1926 tracks?

it used to be about $10 for a record, then tapes came along. It used to be about $10 for a Tape, then cds came along, and those were eventually about $10 for a cd. Now they are trying to get us about $10 for an mp3 album. It costs absolutely nothing to produce more copies like records, tapes and cds do.

Fair enough. I intended my point be that 1926 tracks represents a minuscule slice of the music market.

I should point out something else.

I don't listen to any modern music. Atlanta has a nice classic rock station (The River) which plays in the car. My son likes it too. My eldest is forever listening to jpop and my youngest really doesn't care. The last CD I bought was probably Hawkwind's Live Chronicles in 99. My pandora playlists are a mixture of 80s metal, 70s space rock and Beethoven.Ooh, actually, tell a lie, I did buy a cruxshadow CD last year. But I bought it from the band direct, since they were playing Dragoncon (where I was speaking)

I do have a lot of classical CD's though. Probably because of playing in my schools chamber orchestra (2nd violin) when I was younger. I really with Atlanta has a classic-FM too, NPR just isn't the same.

The level of coverage around here more or less screams "we despise the law". Seriously, does the site need this many stories about a thief?

You don't think that Ars should be publishing a story on a topic which intersects law and technology? Given the interest everyone has in copyright law, I can't understand what your problem is.

Hadn't you noticed Ars has a Law and Disorder section?

Key point: "A STORY". Not half the blasted front page, drooling over the guy in full detail coverage, uplifting him as though he's some kind of folk hero to the little guy.

The man is no such thing.

The guy made his living on the backs of other people by stealing their stuff and sitting around his board rooms BRAGGING about it to others.

You want to make the RIAA and MPAA sit up and take notice of the digital age? I hear simply not buying their garbage works much better than encouraging people like Dotcom to go out and commit mass piracy. Eventually when nobody is lining their pockets any more through the traditional means, they'll adapt. They'll have to. Or they'll die.

it used to be about $10 for a record, then tapes came along. It used to be about $10 for a Tape, then cds came along, and those were eventually about $10 for a cd. Now they are trying to get us about $10 for an mp3 album. It costs absolutely nothing to produce more copies like records, tapes and cds do.

So? Are you one of those ignorant idiots who didn't even get far enough in high school to take basic economics? The price has NOTHING to do with the cost to produce someting. It would be monumentally STUPID to lower the price of something if the demand still existed for it at $10.

This comment is why you will NEVER hav a job that does not involve a hair net and or a smock.

You can get MP3 tracks for $1 on iTunes, yet music piracy is still widespread. How much easier can they make it?

I guess you missed the "fair price" criterium. Fair is what's fair in the eye of the beholder. Is a song recorded in 1976 still "worth" $1? What if it is an Elvis song (for the younger readers, Elvis was a singer who's been dead for a long, long time)?

OK how about a song from 1966? Is it fair to price it at $1? It all depends on what the beholder thinks is fair. Maybe 1956? 1946? 1936? How about 1926? Is $1 still a fair price for a song recorded over 80 years ago? 1926 is the year the "Weimar Republic" joined the "League of Nations".

Note: this discussion has NOTHING to do with "what is the law" or "what the seller deems right".

You know what ISN'T fair in the eye of ANY adult? PEople who think "It costs too much...but since I am a spoiled 5 year old, I feel ENTITLED to have it anyway! So I will take it." That really is so ridiculously pathetic. It is a shame that your parents were never jailed for child neglect at the horrible job they did in raising you.

I think the idea behind the fascination with Kim Dotcom is that media industry needs to adapt to the digital age. Whether or not you agree with Dotcom's tactics, it's going to happen eventually. The MPAA and RIAA suing individual file sharers does not do anything to stop piracy.

All people want is a fair price, accessiblity, and portability.

You can get MP3 tracks for $1 on iTunes, yet music piracy is still widespread. How much easier can they make it?

UltimateLemon wrote:

Xeric wrote:

Remember when Ars was a tech site?

I also remember Ars covering legal pieces related to tech.

They weren't printing this garbage when I started reading.

I don't buy from iTunes because I want to play my mp3s on other devices and carry them around in a thumb drive...device lockin is why people choose to just download .mp3 rather than pay for it only on iPods.

I'm sorry but this is a bunch of bullshit. Amazon has DRM free MP3's that are easily available at the same, sometimes lower prices than iTunes and there library is almost as extensive. People download free MP3's because they are self entitled pricks who think everything on the internet should be free. Sure iTunes has device lock-in, if you want to sync playlists or media from iTunes, but you can always drag and drop the files from the iTunes media browser to your desktop or anywhere else for that matter. M4a (AAC) is supported by Android. As long as the file is DRM free you can play it anywhere as most operating systems, media players, devices support the m4a format. There is no excuse to download pirated files from the internet, that's just what people who are going to do it anyway tell themselves.

People download free MP3s for the same reason they used to make mix tapes from their friend's vinyl back when I was a kid: because they don't have any damn money and they want to listen to music. It's the same as it ever was - just now the RIAA can throw a total emo shitfit because it's possible to track it by spying on everyone's internet.

When push comes to shove, if the person who "stole" it didn't have the cash to buy it ... there obviously could not have been a sale to lose. With zero cost of reproduction and no physical object involved, it leaves us talking about real losses which are pretty esoteric as if they are having a gun shoved in someone's face and their wallet stolen.

Let's not forget when these folks *do* get their hands on some cash, in study after study - even ones funded by they RIAA, it is demonstrated that file sharers consistently spend more money on legitimate music than other demographics. They apparently support the bands they like; and *find* the bands they like by file sharing. Of course there are some deadbeats. There always have been - at least since the days of cassette. But evidence points to them being the exception, not the rule.

For every person who downloads illegally, there are plenty who just look up a tune when they like it and push "buy" ... if they are exposed to the music. These days radio is all but dead; it is increasingly rare to hear as entertainment in social settings. One big way new music is now discovered is through hearing other people's playlists - taking turns throwing out songs (again, not entirely unlike mix tapes back in the day).

IMO, if there's some kid who doesn't have a damn cent anyhow, I'd be far better off if they jump through a few hoops to sneak my track so they can play it for as many people who *DO* have money as possible (and then maybe buy my CD or a ticket to my show or some merch in the future or whatever). An enthusiastic listener can provide direct sales to impulse buys from others; I've seen it play out more than once. Like a carrier for an artist's viral grooves - actively trying to infect new people with the music they like.

That's not to say artists should embrace commercial piracy. But for most musicians, rampaging about casual file sharers is about as smart as sitting on their nuts.

The service kicked off less than hours ago, one year—to the minute—after Dotcom's house was raided and his old file-sharing service, Megaupload, was shut down.

Nice use of em-dashes. Did you just find them? Now what were you trying to get at with this unparsable gobbledegook?

As far as I'm aware, that's correct use of the em-dash. I found the sentence easily readable. You look like a petty—and uninformed—grammatical pedant.(At http://www.grammarbook.com/punctuation/dashes.asp it is argued that the em-dash is overused. I think that it's relatively seldom used.)

Personally, I'd like to see the em-dash vanish completely. I find it unsightly (ymmv). Having said that though, I also found the sentence easily readable and perfectly comprehensible. It's not obvious to me what part of it is "unparsable gobbledegook".

Even at that rate, it's $3m. Not many people can drop that without noticing it....I guess it's not a bad system at all. It's hardly likely to send the guy broke.

I agree, $3M inst a lot of money when it comes to doing this kind of thing properly and the link I sent was fairly old but just to demonstrate a point that storage is far cheaper than people think. I have a 135TB box at work which was bought over a year ago and cost no where near those prices.

Quoting from the Mega site itself: "All encryption is end-to-end. Data uploaded is encrypted on the uploading device before it is sent out to the internet, and data downloaded is decrypted after it has arrived on the downloading device. The client machines are responsible for generating, exchanging, and managing the encryption keys." Court access to the files isn't needed when they can much easier gain access to your home PC.

Most browsers support hardware security devices such as smart cards and USB keys where you can securely store your Mega key protected by something you know (PIN/password to the hardware) and something you have (the card/key itself). Good luck getting the files.

accurrent wrote:

Andrew Norton wrote:

Me, sometimes. Depends on my mood.

Fair enough. I intended my point be that 1926 tracks represents a minuscule slice of the music market.

But tracks from 50s, 60s, 70s, and 80s still represent a big chunk of music market, and they are still expensive. $10 per album + piracy tax for every blank media (more recent example of such insanity which could, if approved, add to the cost of computer hardware and peripherals).

Arthmoor wrote:

The guy made his living on the backs of other people by stealing their stuff and sitting around his board rooms BRAGGING about it to others.

So were the directors of music and movie industry... and banksters... and stock brokers... and CEOs of many multi-national corporations. Your point?

Finally, since I am commenting from the article I can't report posts. Would someone please report all posts made by Lakawak as insulting for the moderator to review them?

A very robust DMCA process huh? That kills everything that made Megaupload so popular.

I seem to understand from KDC's defence that Megaupload already was DMCA-compliant, and pretty reactive at that.

Let's face it, DMCA takedowns are rather inefficient at stiffling content dissemination, but honouring them lets one get away with murder (well, with distributing).

bcassada wrote:

You, sir, are a fool. Your data is encrypted but since they are logging IP addresses they need only raid YOUR home, collect your computer, and have both of the keys needed to access, decrypt, and view your content.

OK.- IP is not proof- I suppose distribution groups already use cascaded proxies (in distinct countries)- is an IP enough to get a warrant, or whatever reasonable cause is needed where you live?- having a click-monkey fill out DMCA takedowns has proved inefficient. Raiding end-users' home one by one will sure get things done- as for 'hav[ing] both of the keys needed to access, decrypt, and view ..', read up

Safe my ass. What he's done here is legitimize his business while appearing to be the guy standing up to bg gov't. What he's also done is effectively washed his hands of responsibility and placed it squarely on the consumer.

Glad to know about your ass.KDC is claiming he will act in accordance to the law, and even beyond maybe, which is seems like a pretty good thing to do. A lot better than the opposite, from a business standpoint.

As for responsibility: the consumer has always been responsible.You don't go around blaming Smith or Wesson after shooting someone with a gun. You don't blame the provider when you willfully distribute illegal files.Again, consumers are usually not prosecuted because it's terribly inefficient, and incredibly unpopular.

bcassada wrote:

For those using this legitimately, there is reason to be happy. For others....knock knock, Neo.

Sir (or madam), you too are a fool. Legitimacy is hardly an intrinsic quality, since it is decided in courts when put in doubt. And some people can doubt most anything.

As for the Matrix reference, I might not have been paying due attention, but doesn't that Neo guy get the hot chick, save humanity (maybe), and even manage 1 or 2 facial expression in the course of 3 movies? Isn't the knock knock part actually a _good_ thing?

robrob wrote:

mrlm wrote:

He has millions, he could afford to buy 25PB of storage if he wanted to do it that way.

Even at that rate, it's $3m. Not many people can drop that without noticing it.

Depends on what you call 'many'. There are quite a few actually.Well, maybe not without noticing. Although there are literally tens of thousands around the world with net worths breaking the nine figures, so ...[/quote]

robrob wrote:

A fair point on the storage offered though, all they need to do is hit a minimal number of people actually signing up to pay and they can simply restrict free users as much as necessary to be profitable. Being an accountant, I decided to run a little scenario.

To take Amazon's S3 price for over 5PB of storage per month (the lowest they list), at 5.5c per GB to store per month, assuming a 10% utilized storage by each free user and full utilization by paying users, for every 100,000 free users you'd need about 5,000 paying the lowest monthly fee to cover it. It's likely to be cheaper for Dotcom to store data than this rate, although there'd be bandwidth costs in there, but again they'll simply be paying for whatever pipes they have and restricting users to compensate (it's in the FAQ that it's how they'll manage bandwidth). Factor in that it's probably less than 10% for normal users and definitely less than 100% for paying, it's likely a couple of percent conversion to paying users to manage it all. And that's not including advertising revenue.

I guess it's not a bad system at all. It's hardly likely to send the guy broke.

Nice. So this thing might actually work ...

igor.levicki wrote:

Most browsers support hardware security devices such as smart cards and USB keys where you can securely store your Mega key protected by something you know (PIN/password to the hardware) and something you have (the card/key itself). Good luck getting the files.

But you can be legally ordered to unlock the device.Two level access would be better (a password to unlock a mostly empty account, another to access the 'real' account). Deniable, of course.But that's not talking like someone living in a democracy ...

You can get MP3 tracks for $1 on iTunes, yet music piracy is still widespread. How much easier can they make it?

I guess you missed the "fair price" criterium. Fair is what's fair in the eye of the beholder. Is a song recorded in 1976 still "worth" $1? What if it is an Elvis song (for the younger readers, Elvis was a singer who's been dead for a long, long time)?

OK how about a song from 1966? Is it fair to price it at $1? It all depends on what the beholder thinks is fair. Maybe 1956? 1946? 1936? How about 1926? Is $1 still a fair price for a song recorded over 80 years ago? 1926 is the year the "Weimar Republic" joined the "League of Nations".

Note: this discussion has NOTHING to do with "what is the law" or "what the seller deems right".

You know what ISN'T fair in the eye of ANY adult? PEople who think "It costs too much...but since I am a spoiled 5 year old, I feel ENTITLED to have it anyway! So I will take it." That really is so ridiculously pathetic. It is a shame that your parents were never jailed for child neglect at the horrible job they did in raising you.

You know what else isn't fair? Those who feel entitled."well, I got these rights for 28 years, and in exchange i have to give it up tot he public.But I feel ENTITLED to more, so change the law please.

And so it continues.

copyright term lengths now are the biggest entitlement of the lot, AND they're theft. (as in there's something TAKEN from the public domain that we no longer have, not a copy, taken

If you want to talk entitlements, and 'stealing' try starting there, after all that was around long before P2P.

"Sometimes good things come out of terrible events," Kim told the gathered audience of a few hundred people. "If it wasn't for a giant comet hitting the Earth, we would still be surrounded by angry dinosaurs—hungry, too!" Kim smiled. "And if it wasn't for the raid, we wouldn't have Mega."

I don't buy from iTunes because I want to play my mp3s on other devices and carry them around in a thumb drive...device lockin is why people choose to just download .mp3 rather than pay for it only on iPods.

Uh, the vast majority of tracks on iTunes are DRM-free. There isn't device lock-in. There hasn't been in years.

I don't buy from iTunes because I want to play my mp3s on other devices and carry them around in a thumb drive...device lockin is why people choose to just download .mp3 rather than pay for it only on iPods.

Uh, the vast majority of tracks on iTunes are DRM-free. There isn't device lock-in. There hasn't been in years.

What Kesh said. I have 1731 items in my Purchased playlist. How many items in my entire library are covered by Apple DRM?

These 3 files are holdouts that never were unlocked after Apple abandoned DRM. The other songs from these 2 groups were all unlocked successfully so I can only guess it's not the artists that want them under DRM still.

Modern birds are a clade of dinosaurs so he is technically correct. Our ancestors were surrounded by dinosaurs the same way we are today surrounded by dinosaurs. I can see one outside my window right now.

Although we know what you are saying, birds are not dinosaurs any more than you are a Pelycosaur so the statement man walked with dinosaurs is false.